Fannie and Freddie seek to cut dividend on government stake: FT

By IBT Staff Reporter On 01/27/11 AT 2:48 AM

Mortgage companies Fannie Mae and Freddie Mac have been lobbying the Treasury to accept a lower dividend on the preferred stock issued during the government bail out, the Financial Times said, citing people familiar with the situation.

A dividend cut would allow the two mortgage giants to begin repaying $150 billion in taxpayer aid, the sources told the news paper.

It would also pave the way for a restructuring of the companies by cutting the amount of outstanding preferred stock held by the Treasury, the FT said.

Fannie and Freddie declined to comment to the paper.

The companies were not immediately available for comment outside regular U.S. business hours.

(Reporting by Sakthi Prasad in Bangalore; Editing by Dhara Ranasinghe)